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The average homeowner isn’t likely to know much when it comes to the costs of materials and labor put into home repairs. As a result, it’s important to stay informed when dealing with contractors so you don’t end up paying for repairs you don’t need.

It’s often said that if something seems too good to be true, then it probably is. This advice is invaluable when dealing with contractor fraud. To avoid fraud, look out for the following suspicious characteristics:

• Contractors that contact you looking for work.
• Unsolicited, free home inspections that turn up problems you were previously unaware of, or discounted rates that are only offered that day.
• Pushiness on behalf of the contractor that you commit to repairs immediately.
• Contractors that request money in advance

Another dangerous type of fraud involves using a homeowner’s insurance to pay for unnecessary repairs. If a contractor causes intentional damage to an area of your home and convinces you that it is an acceptable use of your insurance policy, you may be held liable for insurance fraud.

Home Considerations

Remember, if you didn’t contact them, you probably don’t need them. Be wary of any contractor that shows up at your door out of the blue and claims that your home is damaged. To ensure that the problem they discovered is a legitimate concern, always get multiple opinions before committing to anything.

Contact Warren G. Bender Co. for more tips on how to protect your home and avoid contractor fraud.

Federal minimum wage law is governed by the Fair Labor Standards Act (FLSA). The current federal minimum wage rate is $7.25 per hour for nonexempt employees. California law complements federal law and, in some cases, prescribes more stringent or additional requirements that employers must follow. Whenever employers are subject to both state and federal laws, the law most favorable to the employee will apply.

MINIMUM WAGE RATE
Effective Jan. 1, 2018, the minimum wage rate in California is $11 per hour for employers with 26 or more employees and $10.50 per hour for employers with 25 or fewer employees.
“Employee wages” are the entire amount of compensation an employee receives for his or her labor or services. Wages can be fixed or based on time, task, piece, commission or other method.

Minimum wage rate increases will take place every year until the minimum wage rate reaches $15 per hour by 2022. After the rates described below are implemented, the state will adjust the minimum wage rate annually to reflect the rising cost of inflation.

California law allows the governor to temporarily suspend the minimum wage rate increase schedule if the state’s economic condition does not support an increase. Under a temporary suspension, the implementation schedule would be delayed by one year. However, the governor may not implement a temporary suspension more than twice.

MEALS AND LODGING CREDITS
If the employee voluntarily agrees in writing, employers may generally include in employee wages part of the cost of meals and lodging they provide.
The adjacent table provides the maximum amount employers may credit for meals and lodging. Special rules exist for sheepherders and employees of organized camps.
• Sheepherder wages cannot be offset by meal and lodging credits; and
• Organized camps may deduct the entire value of meals and lodging from the salary of a student-employee, camp counselor or program counselor.
Refer to the California wage orders for more information on industry-specific meal and lodging credits.

TIPPED EMPLOYEES
In California, employers must pay tipped employees a wage rate equal to or greater than the state’s minimum wage rate. Employers may not deduct a tip credit from their employees’ wages. Tip payments include any tip, gratuity, money or other gift a patron gives an employee over and above the actual amount of the goods, food, drink, items or services the patron received from that business.

Employers cannot enter into contracts with their employers to override tipped employee regulations.

SUBMINIMUM WAGE RATES

California law allows disabled workers, apprentices, learners, student-employees, camp counselors and program counselors to receive wage rates below the minimum state rate. In certain cases, a license may be required for a subminimum wage rate to apply. When a license is required, the DLSE may set the terms and conditions of employment. Licenses may be revoked if the employer violates any term or condition of employment set by the license.

DISABLED WORKERS

Employers that obtain a special license issued by the DLSE may pay disabled workers a wage rate below the state’s minimum wage rate. Employers must generally obtain a separate license for each disabled employee. These licenses are valid for up to one year, and must be renewed on a yearly basis.

Nonprofit employers, including sheltered workshops and rehabilitation facilities, may receive a general license to employ disabled employees at subminimum wage rates, instead of individual licenses for each employee. Employers may be required to renew these licenses every year or on a more frequent basis.

APPRENTICES AND LEARNERS

The DLSE may also issue special licenses authorizing employers to pay subminimum wage rates as low as 85 percent of the state’s minimum wage rate to employees during their first 160 hours of employment in occupations in which they have no previous similar or related experience.

ORGANIZED CAMPS

Employers operating an organized camp can pay their student-employees, camp counselors and program counselors a minimum wage rate equal to 85 percent of the state minimum wage rate. These employers can also deduct the entire value of meals and lodging they provide to these employees.

MINIMUM WAGE RATE EXEMPTIONS

California’s minimum wage rate requirements do not apply to certain occupations and industries. Separate specific minimum wage rate and payment requirements, described in a series of minimum wage orders, apply for these employees.

Other exceptions to California’s minimum wage rate requirements include individuals who are closely related to their employer (parent, spouse or child) and outside sales personnel.

NOTICE AND POSTINGS

Employers are required to post and maintain updated information on the state’s minimum wage rate. The Industrial Welfare Commission (IWC) has provided a model poster that employers can use.

Employers covered by one of California’s industry-specific wage orders must also display a copy of the applicable wage order. These wage orders are available on the IWC’s website.

Business necessity

Business necessity is an overriding legitimate business purpose. Business necessity does not exist when the employee can demonstrate that the employer could have implemented or used an existing alternative practice that would avoid a wage differential while serving the same business purpose.

PROHIBITED WAGE DISCRIMINATION

In general, the California Equal Pay Law prohibits employers from discriminating on the basis of sex in the payment of wages.

Subject to some limited exceptions, female and male employees are entitled to equal pay for substantially similar work. Substantially similar work is determined by evaluating the level of skill, effort, responsibility and performance under similar working conditions.

California’s Equal Pay Law allows employers to pay different wages for employees of opposite sex when the wages are based on:
• A seniority system;
• A merit system;
• A system that measures earnings by quantity or quality of production; or
• A differential based on any bona fide factor other than sex.

Employers that violate California’s minimum wage laws commit a misdemeanor, punishable by a fine of at least $100, imprisonment for at least 30 days or both a fine and imprisonment. Employers that violate tipped employee regulations also commit a misdemeanor, punishable by a fine of up to $1,000, imprisonment for up to 60 days or both.

CIVIL PENALTIES

Employers that pay wages below the state minimum wage rate or that violate California’s equal pay laws are subject to civil lawsuits, and could be ordered to pay:
• The difference between what an employee’s wages should have been and what they actually were (plus interest);
• Liquidated damages (in an amount equal to the wage difference plus interest); and
• Court costs and reasonable attorneys’ fees.

Employers may avoid paying liquidated damages if they can prove that their actions were in good faith.

Employee lawsuits must be filed within two years of when the violation takes place (or within three years, for willful violations). In the case of any wilful violation, the DLSE can request and obtain injunctions against any further violations.

The identity of any employee that files a complaint for wage discrimination with the DLSE will remain confidential during an investigation and will not be disclosed until the validity of the claim is established.

ADMINISTRATIVE PENALTIES

In addition to the civil penalties described above, the DLSE may issue citations for any employer that violates the state’s minimum wage laws. Cited employers may be subject to fines as follows:
• $100 per underpaid employee for each pay period in which the employee is underpaid, for a first offense; and
• $250 per underpaid employee for each pay period in which the employee is underpaid, for a second or subsequent violation.

Employers can appeal these fines by requesting a hearing within 15 days of receiving the citation.

MORE INFORMATION
Contact Warren G. Bender Co. for more information on wage payment and work hour laws in California.

Kidnap and extortion is a legitimate threat for U.S.-based businesses. Unfortunately, in many parts of the world, these illegal acts have become a business in and of themselves, with sights set on wealthy U.S. companies and business travelers. In most cases, kidnappers take professionals captive to make a profit, releasing the individual once demands have been met.

Because many overseas attacks are related to business, the need for kidnap and ransom coverage continues to grow. This is particularly true in areas where law enforcement has a blind eye to guerilla activity and in areas that are stricken by poverty. To combat financial losses in the event of a kidnap or extortion situation, Kidnap, ransom and extortion (K&R) insurance is a practical risk transfer option.

What is K&R Insurance?

K&R is typically a stand-alone policy for employees engaged in international business travel. It covers costs relating to events such as:

• Kidnap and ransom: seizing an employee with the intent to demand money in return for the employee
• Wrongful detention: confining an employee under the guise of government
• Extortion: demanding money with the threat to injure or kill an employee, damage property, divulge trade secrets or spread a computer virus
• Hijacking: holding an employee for an extended period of time against his/her will on an airplane, motor vehicle or ship.

Coverage includes ransom and extortion payments, in-transit money delivery coverage, consultant costs, negotiation costs, public relations costs, interest fees coverage, judgment settlements and defense costs. The policy also covers harm to the captive employee and his/her family such as death and dismemberment benefits, medical costs for injuries and psychiatric treatment after the employee is freed. Coverage is particularly helpful during times of negotiation, as experts are provided to the company to successfully free the captive employee with minimal harm.

In addition to purchasing proper coverage, check with your insurance carrier to see if they offer training sessions for traveling employees to educate them on how to react in a hostage situation. The training typically provides insight on how to initially deal with captors until an expert is available to take over negotiations.

Insurance carriers also advise that employers not reveal that they have K&R coverage. This confidentiality provision is designed to thwart employees from revealing to potential captors that they are insured. A large K&R insurance policy may make the employee a lucrative target.

Who Needs K&R Insurance Coverage?

Companies operating overseas need K&R insurance to protect their traveling employees. This applies to businesses of all sizes—kidnappers do not prefer larger companies over the small ones. In this business, everyone with money is considered a good target.

The coverage is particularly beneficial for employees who travel to regions of the world that are considered high risk. Countries with a consistently elevated rate of kidnaps and/or extortions include Afghanistan, Brazil, Honduras, India, Mexico, Nigeria, Pakistan, Philippines, Somalia, Venezuela and South Africa.

Underwriting Considerations

The premium for this type of coverage is generally based on the following:

• Type of industry
• Revenue of the insured company
• Country of residence
• Travel patterns of the employees

At Warren G. Bender Co., we can assist you in designing a K&R a policy that meets your company’s specific needs. We work closely with K&R insurance carriers to ensure you have the coverage, training and support you need, when you need it most. Call us today at (916) 380-5300 for more information.

If you conduct business in your home, insuring your business properly is part of a solid risk management plan. We can help!

What Protection Does it Offer?
Common coverages for home-based businesses include personal business property, professional liability, business income, personal and advertising injury, loss of business data, crime and theft, workers’ compensation and auto coverage. Depending on the type of home-based business you have, not all coverages apply, and other coverage options may be available.

Coverage Options
Based on your business needs, you have three basic coverage options to choose from, depending on your level of risk:

1. Homeowners Policy Endorsement. This provides the least amount of coverage and, therefore, is not ideal for most home-based businesses (depending on the level of risk). While it may provide enough coverage for a freelance writer with one computer and no business foot traffic, it’s not enough for someone who employs others, has clients visiting his or her home or has valuable business equipment and/or inventory.

2. In-home Business Policy. More comprehensive than a homeowners policy endorsement, in-home business coverage is a stand-alone policy that provides higher amounts of coverage for business equipment and liability.

3. Business Owners Policy, or BOP. A BOP bundles property and liability insurance into one policy. Created specifically for the small- to mid-size business, a BOP covers your business property and equipment, loss of income, extra expense and liability. It is the most comprehensive property and liability option. It does not include workers’ compensation, health or disability insurance, which are available as separate policies.

What’s Your Risk?
While most homeowners insurance policies do cover a limited amount of business equipment—computers, copiers and printers, to name a few—it’s likely that what you own is worth more than your policy’s limits. Also, your homeowners liability insurance probably won’t cover any injuries that may occur to the employees or clients that you have on your premises. What’s a home-based businessperson to do?

We’re Here to Help
Properly insuring your home-based business is crucial to protecting both your business and your home. At Warren G. Bender Co., we understand the small business owner’s personal and business needs, and can help you tailor coverage that’s as unique as the products and services you provide. Contact us today at (916) 380-5300 to learn more about how we can help you insure your livelihood.

While buying a used vehicle will save you money and help you avoid depreciation costs, it is important to do your research before you purchase one. To avoid purchasing a car with hidden problems, look out for the following warning signs:

• Excessive wear and tear in the interior.

• Damp, musty odors. These are indications of leaks in the windshield, weather stripping or heater core.

• Cars that ride lower in the front as compared to the back. This indicates worn springs, which can be an expensive repair.

• Tires with worn outer edges from the front end. This can indicate that the car is in need of an alignment.

• Clanking noises when the vehicle is in gear. This can indicate a problem with the drive shaft universal joints.

• Transmission fluid that is black or brown. This may indicate internal engine damage.

When buying used, the best way to ensure you purchase a reliable car is by referencing a vehicle history report. Carfax and AutoCheck are services that can provide helpful details on a vehicle’s collision history, maintenance history and odometer record.